Australia’s Carbon Plan Passes as Gillard Faces Asylum Fight

Oct. 12 (Bloomberg) -- Australia’s lower house passed Prime
Minister Julia Gillard’s carbon plan today as she struggles to
rebound from record-low public support and win backing for a
more closely contested vote on immigration policy.

The program to cut Australia’s carbon emissions, announced
on July 10, was approved with votes from the Greens Party and
three independent lawmakers wooed by Gillard. A legislative
victory on the carbon tax, which is contingent on a vote in the
upper house Senate next month, will help her Labor Party sell
the plan to the public, said Rodney Smith, a professor of
politics at the University of Sydney.

“In political terms, this has to be seen as a success,”
he said by telephone today, adding that in the longer term
people will judge the government on its implementation. “Labor
has been grappling with this for years. Now it can move on.”

The momentum from the climate bill may prove short-lived if
Gillard loses a vote this week on her amended law for handling
asylum seekers. A defeat for the prime minister, who is trying
to sway Australians deterred by rising costs associated with the
emissions plan, could further erode her popularity, which last
month dipped to the lowest of any leader in the past 18 years.

Gillard, whose public approval peaked at 48 percent weeks
after she replaced Kevin Rudd in June of last year, got 28
percent in a Newspoll survey published yesterday in the
Australian newspaper. She was backed by just 23 percent at the
beginning of September, the lowest figure for a prime minister
since 22 percent for Paul Keating in 1993.

The latest Newspoll, taken Oct. 7-9, was based on 1,146
interviews and had a margin of error of plus or minus three
percentage points. The next national vote is due in 2013.

‘Competent Government’

“There’s a belief out there that this is not a competent
government,” said Ian McAllister, a professor at the Australian
National University in Canberra who specializes in elections.
“Unless they invent a cure for the common cold and distribute
it freely forever, I can’t see anything that will save them at
the next election, the polling is so bad.”

Australia, the developed world’s biggest per-capita
polluter, plans to make about 500 companies pay A$23 ($22.90) a
ton for their carbon emissions starting in July 2012, before
switching to a cap-and-trade system three years later. Gillard,
the country’s first female prime minister, has said she wants to
cut about 160 million tons of carbon pollution in 2020.

‘Right Thing’

“I’ll tell you this about opinion polls, we’ll be able to
look subsequent generations in the eye and say we did the right
thing,” Treasurer Wayne Swan told reporters in Canberra today.

Rudd, who was ousted as head of the Labor party and now
serves as foreign minister, kissed Gillard today after the
legislation passed in the lower house. Rudd was dumped because
of a drop in poll ratings amid a battle with miners over his
plans for a 40 percent tax on resource profits and after he
shelved his strategy for curbing greenhouse gas pollution.

Gillard will likely counter opposition to the plan by
stressing the tax cuts households will receive to cope with
rising costs and the more than A$13 billion in funding that will
be invested in clean energy, said Haydon Manning, an associate
professor of politics at Flinders University in Adelaide. She
faces the added hurdle of having promised not to implement a
carbon tax during her election campaign last year.

The government today named Jillian Broadbent, a board
member at the Reserve Bank of Australia, to help design the A$10
billion Clean Energy Finance Corp., which will provide new
financing for renewable energy projects in Australia.

Energy Prices

The government’s climate change program is likely to draw
criticism as energy prices continue to rise, Nick Economou, a
lecturer at Monash University in Melbourne, said by phone.

“We know the cost of energy is going up,” he said. “The
problem for the Gillard government is that if you get a spike in
energy prices due to something other than the carbon tax,
they’ve set themselves up to be blamed for it.”

Company executives have argued that the tax will threaten
mining jobs and drive up airfares and food prices. Anglo
American Plc, a coal miner in Australia, said the carbon price
would hurt coal investment in the country. Aluminum producers
estimate Gillard’s program will add A$120 million in costs in
its first year and A$400 million in 2020.

BlueScope Steel Ltd. and OneSteel Ltd., the Australian
steelmakers, will get A$300 million in assistance under the
bill. The Greens Party will support the plan for steelmakers in
both houses of parliament as long as the government considers an
amendment to support projects to create “green” jobs, its
deputy leader Christine Milne said yesterday in a statement.

Coming Election

The Liberal-National coalition put forward an amendment
that would have made the carbon emissions legislation dependent
on the result of the next election, opposition climate spokesman
Greg Hunt said Oct. 11 in a statement.

The migration law changes would make it legal for the
government to send asylum seekers to another nation for
processing. Immigration Minister Chris Bowen presented the
legislation to parliament after the High Court in August
rejected his policy of assessing claims offshore.

The new bill may fail to pass the lower House, Monash’s
Economou said.

“If they can’t get it through the lower house, the
government has got so many critics that they will go into hyper-drive and declare that the government has lost confidence and we
ought to go to a new election,” he said.